Development Review 2009

Introduction

Book Reviews.

Development aid organisations are learning new methods to deliver effective aid. Organisational learning theory can offer a new perspective on this process of accountability. By viewing accountability as a relational process, communication between aid practitioners can
become a field of reflexive or “deutero” learning. This is important for a complex aid environment in which the policies of partnership, harmonisation and alignment require relational as well as technical skills so that vital links across programmes can be made. Irish aid organisations have an apt history, policy and style to make a particular contribution towards learning such reflexive practices. While the data for this paper is primarily intra-organisational, such a category is increasingly loose in the changing context of aid. What is sought are paths to change practice at different levels or at any instance of aid organisational life.

The role of the private sector (and particularly that of transnational corporations) in the achievement of international development objectives has long been a focus for academic debate and the source of much controversy. Recently, the dominant perspectives on
international business have shifted from an often antagonistic questioning of the impacts and intentions of transnational investment in the developing world to an increasing engagement between international institutions, governments and corporations and strong advocation of market-led private sector solutions over state intervention and regulation. Most recently, there have been calls for a deepening of engagement with the international business sector as a
way of dealing with the problems of development finance, in particular meeting the Millenium Development Goals.

Whilst the importance of further explorations of the ways in which state and private sectors can best complement each other in achieving development objectives is clear, this paper is intended to sound a word of caution about these developments. In particular, questions need to be raised about the contrasting impacts of different types of private sector engagement in development and the importance of understanding the political and historical context of market reforms and the promotion of transnational investment. The paper argues that
blindness to context has led to the dominance of a corporatised form of privatisation that too often stifles the potential of more localised embodiments of the private sector.

This paper considers two prominent frameworks for defining the scope of business responsibility for human rights. The first approach advocates the extension of business responsibility beyond the boundaries of the enterprise to encompass broader spheres of influence. The second approach advocates a business responsibility to respect human rights (but not also to undertake the “positive” responsibility to protect, promote or fulfil rights). Building on a critical evaluation of these competing accounts of business responsibility, the paper outlines a modified account that is referred to as a framework of spheres of responsibility.

On such an account, business responsibility for human rights outcomes is conceptualised not only in terms of direct harms imposed by business, but also in relation to corporate influence over broader institutional relationships and structures that shape and constrain the substantive
realisation of human rights. The paper suggests that such a model of responsibility may be given concrete institutional expression in the form of shared and distributed responsibilities for institutionally mediated outcomes, and points towards some possible directions in
which institutional innovation of this kind might proceed.

Policy coherence for development is achieved when policies across a range of domestic policy areas support, or at the very least do not undermine, the attainment of overseas development objectives. This article introduces the topic of policy coherence and analyses the coherence of Ireland’s policy on inward and outward foreign direct investment with Ireland’s overseas development objectives. We recommend that Ireland consider a pilot tax sparing arrangement with Irish Aid partner countries, take further steps to facilitate outward investment in developing countries and significantly improve the legislation governing the behaviour of Irish citizens in the area of bribery and corruption.

In relation to Ireland’s low rate of corporation tax, we find that Ireland does not compete with Irish Aid partner countries for international investment. Nevertheless, we recommend that within the context of any future renegotiation of EU corporation tax policies, Ireland should work to ensure that the position of developing countries is taken into consideration.

Tax is the most sustainable source of development finance providing developing countries with revenue for investment in essential services and infrastructure, while promoting greater accountability between state and citizen. Yet the sovereign right of government to tax economic activity has been undermined by increasingly globalised capital flows, a number of commonly prescribed tax policies which form part of the so called “tax consensus” – a concept increasingly challenged in the wake of the financial crisis – and by the exploitation of loopholes between jurisdictions by individuals and multinationals. It is estimated that corporate tax evasion costs developing countries $160 billion each year – greater than the global aid budget.

This paper explores recent developments in global taxation and their impact on developing countries. Key questions are raised regarding Ireland’s role within this global system of capital movement. Findings suggest that tax competition and the lack of international tax cooperation are harmful for developing countries and that Ireland should consider the impact of its tax policy on development,both domestically and in international negotiations.

There is increasing international attention by the UN system, civil society and business to the impacts of business on human rights and the environment with particular attention to developing countries. This paper examines this with particular reference to the place of the Irish state as an investor through its pension fund. It examines the attempts of the fund to satisfy public concerns over the ethical management of the fund. The paper finds that the fund is legislatively prevented from developing a meaningful and responsible investment policy. The paper contrasts this with the internationally recognised best practice undertaken by the Norwegian State Pension Fund. It analyses the particular mechanisms the Norwegian state has put in place to ensure the twin policy objectives of securing a satisfactory return for future generations and ensuring respect for human rights and the environment. The paper places a particular focus on the appropriateness and applicability of the process of excluding investments that entail complicity in rights abuses. It considers also how these could be successfully transposed onto the Irish fund.

The ever-growing influence of huge multinational corporations,and their potential impact upon human rights is an increasing cause for concern by human rights observers. There is no clearly defined legal framework by which business can be held accountable for their influence on human rights, particularly in the developing world. However, there are a number of tools including business codes of conduct, civil claims and international instruments, which are being used in pursuing corporate accountability for human rights. The following contribution examines one of these tools, the OECD Guidelines for Multinational Enterprises.

Each country which adheres to the Guidelines is required to provide a National Contact
Point, whose role it is to promote the Guidelines and investigate any complaints or issues raised (known as “specific instances”).Drawing upon case studies of these specific instances, including the recent Corrib gas pipeline complaint, this article makes some assessment of the success and potential of the Guidelines, including some recommendations for the future.

 The increasing emphasis on the role of business in development often pays inadequate attention to the lack of effective means of accountability for corporate entities whose activities may contributeto violations of human rights. Within an international law andhuman rights framework, this article considers the right to development and the place of corporate actors in the development process, as highlighted in the Millennium Development Goals. It analyses various attempts at regulating business activities, including voluntary mechanisms and proposed United Nations norms applicable to transnational corporations. The article also explores established and emerging means of accountability which might be applied to corporate conduct which is contrary to established norms of human rights and international humanitarian law. It proposes that business participation in the development process must be a two-way street, with businesses being subject to duties and binding obligations when being granted access to markets, labour and resources.